Russian SWIFT money transfer system analogue

This topic has previously been covered in the Russian economy thread but news today could transform it so I have started this thread.

Last summer the NSA in the US was hit by a large hacking tools and data theft, parts of which have been slowly released. As part of a massively important release just made is a lot of information on the NSA's penetration of SWIFT. The US already has 'front door' access into SWIFT for terrorist related enquiries, little policed apparently, but for other reasons the US decided that it needed 'back door' access as well. This has now been publicly documented, no doubt to the huge anger of SWIFT who may well not known about it and their customers who definitely didn't.

This however presents a huge opportunity to the Russian, and Chinese, SWIFT analogue networks if they are able to take advantage of it. The strategic ramifications for the World's financial systems, the oversight of them and the US$'s place in them will be on a lot of peoples minds this Easter.

Russia already has its alternative to Swift, called "Mir":https://en.wikipedia.org/wiki/Mir_(payment_system)It was deployed because bank transactions from and to Crimea are cut from Swift, and because of fears that escalation of sanctions may lead to the entire Russian Federation being cut.

Svyatoslavich wrote:Russia already has its alternative to Swift, called "Mir":https://en.wikipedia.org/wiki/Mir_(payment_system)It was deployed because bank transactions from and to Crimea are cut from Swift, and because of fears that escalation of sanctions may lead to the entire Russian Federation being cut.

There are basically two different money transfer systems. Putting it simplistically, the first and biggest by volume is for clearing the billions of credit/debit card transactions whilst the second and biggest by value is for inter-bank clearing and account to account transfers. Both operate within countries and internationally, the first being typically performed by the US companies Visa/Mastercard and the second by SWIFT (based in Belgium).

Mir is not really an alternative to SWIFT as it seems to be primarily aimed at the first activity. It was rapidly set up at the start of sanctions to end the strategically critical vulnerability of card payment systems inside Russia to this area being sanctioned. China has a similar system, UnionPay I think, in place. Both will have their own gateways into the international card payments systems, to allow multi country payments/receipts, that are probably independent of SWIFT, I don't know.

SWIFT is the systems by which for example Russia gets paid for oil and gas and other exports, pays for imports and when Russian companies/people pay each other with a direct money transfer.

Russian companies seem to be complaining because these new Russian systems are more expensive than the existing foreign ones. Showing that they are no different from anyone else in putting their own interests first!

Number one priority for Russia was to remove the vulnerability to card traffic disruption which now seems to have been done. Second priority was to implement a SWIFT analogue using SWIFT transaction specifications allowing current SWIFT users to switch between the alternatives at will. There was a lot of talk about this two years ago but it then fell very quiet, which is probably to be expected given its strategic importance.